Level up your savings through long-term investments proven to grow wealth.
Am I old enough?
You must be 18 years old to open your own investment accounts to buy stocks and bonds. But if you can’t wait to get started, you’ll need to find an account custodian (usually a parent or guardian, but grandparents and trusted family friends work too) to set up a custodial investment account in both your names.
1. The Stock Market
When you buy a stock, you’ve essentially purchased a fraction of a particular publicly traded company—these are called shares.
Investing in stocks is one of the best ways to
invest money and build wealth. For comparison, a traditional bank savings account pays 0.23% in interest* each month while the average annual return on stock market investments has been about 10% for the past decade.**
To start, you will need to set up a brokerage account using a website like eTrade or Fidelity (ask a trusted adult to help you pick; look for a site with no fees). You’ll want to decide on a risk tolerance, in terms of the kinds of stocks you buy, and set goals.
There is a lot more to cover regarding the stock market, so do your research!
2. Roth IRAs
IRA stands for individual retirement account. Note the word retirement. That’s a clear indicator that these are long-term investments. That said, a Roth IRA is one of the best retirement accounts you can open. Bankrate says it best: “You can deposit after-tax money, grow that money and then take it out at retirement (age 59.5 or older) tax-free forever." Just like with your custodian investment account, if you’re under 18, you’ll need your parent or guardian to open you a custodial Roth IRA. Because these accounts are so awesome, there is a limit to the amount of money you can deposit each year. We recommend maxing it out annually.
This stands for certificate of deposit. You deposit a lump sum with a bank for an agreed upon period of time (three-month to five-year terms). The longer the term you agree to (the time you let them have your money and don’t withdraw it), the higher the interest rate they’ll pay you. Current annual interest yields range from 1% to 5%ª. Again, much higher than the standard savings account yield of 0.23%.*
Bonds are essentially loans you give the U.S. government (or a company) in exchange for interest. There is little to no risk. U.S. Series EE and Series I bonds offer different terms and interest rates, and there are paper bonds too. Research and compare each type. Currently, Series EE bonds earn a fixed interest rate of 2.10% ª for 20 years, though you can cash it in as early as one year or keep it for another 10 years. Series I bonds earn much more – currently 6.89% ª – but the rate is not fixed. While the variable rate presents some risk, it’s still extremely low. Bonds work best as long-term investments.
*U.S. average APY in 2023, according to bankrate.com
Put Your Money to Work
Even more investment options to research and try!
- Real estate
- Mutual funds
- Gold and silver
- Oil and gas
- Livestock and meat
- Agriculture products
- Foreign currencies
- High-yield savings accounts